Eugen von Böhm-Bawerk (1851–1914) developed Austrian capital and interest theory. He also served as finance minister; distinguish the economic account of his work from his political biography.
Böhm-Bawerk taught in Innsbruck and, from 1904, in Vienna. He also served as finance minister; those biographical facts do not themselves establish the truth of particular economic claims. [University of Vienna — Eugen Böhm Ritter von Bawerk, archival biography]
In Positive Theory of Capital he distinguishes provision now versus later, undervaluation of future benefits and advantages of longer production methods. This is his theoretical explanation, not a direct formula for today’s interest rate. [Böhm-Bawerk — The Positive Theory of Capital, Book V, Chapter V]
In the author’s example, a 30% advantage from the first two factors and a 25% production advantage yield 30%, not 55%. Alternative uses of the same good cannot be enjoyed simultaneously. [Böhm-Bawerk — The Positive Theory of Capital, Book V, Chapter V]
A more advantageous time-consuming method requires present goods to bridge the wait for its result. Merely extending the calendar does not prove a higher return for every project. [Böhm-Bawerk — The Origin of Interest, reply to J. B. Clark]
Replying to Clark, he distinguishes the absolute period from the first input and the average interval between successive labour or land services and completion of the consumption good. It is not the oldest tool’s age. [Böhm-Bawerk — The Origin of Interest, reply to J. B. Clark]
More output per unit of original input and a higher annual percentage return on capital are different quantities. Longer commitment of resources can offset a technical advantage through higher interest charges. [Böhm-Bawerk — The Origin of Interest, reply to J. B. Clark]
Böhm-Bawerk expressly rejects reading his theory as a reward for painful abstinence. He explains a difference in the valuation of present and future goods; he does not assume the investor must go hungry during production. [Böhm-Bawerk — The Origin of Interest, reply to J. B. Clark]
Böhm-Bawerk died in 1914. Applying his concepts to Bitcoin is a later interpretation; do not present it as his endorsement of a particular technology or a current investment product. [University of Vienna — Eugen Böhm Ritter von Bawerk, archival biography]
For the clearest picture, read this entry together with Carl Menger, Capital Goods, Roundabout Production, Time Preference.